Commercial coal mining opened up for all companies

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In a bid to attract investments and boost coal production, the government approved promulgation of an ordinance to open up the coal mining sector further by allowing non-coal companies to take part in auctions without end-use restrictions.

The Centre also gave its nod for concluding auction of iron ore and other mineral mines before the expiry of their mining lease on March 31 to avert disruption in production.

Besides, the Union Cabinet, which met under by Prime Minister Narendra Modi, approved Rs.5,559 crore viability gap funding for the proposed North-East gas grid and divestment in Neelachal Ispat Ltd by six public sector undertakings (PSUs), among others.

The Union Cabinet approved promulgation of Mineral Laws (Amendment) Ordinance 2020 to amend Mines and Minerals (Development and Regulation ) Act 1957 and Coal Mines (Special Provisions) Act 2015 to open up coal mining to non-coal players while removing restrictions on end-use of the fuel.

The measure, the government believes, will promote foreign direct investment and ease of doing business in the sector. The opening up of the sector without end-use restrictions will boost both production and mining efficiency, besides substituting import of coal worth about Rs 30,000 crore.

Speaking to the media, oil and steel minister Dharmendra Pradhan and coal minister Pralhad Joshi said that the promulgation of the ordinance will aid the sector’s growth. “The ordinance will allow auction of 46 iron ore and other mines before March 31, 2020. Though the auction process of these mines have started, this amendment will strengthen the auction process and it will also facilitate the seamless transfer of all statutory clearances,” Pradhan said.

By the Coal Mines (Special Provisions) Act (CMSP Act), 204 blocks that were cancelled by the Supreme Court had end-use restrictions.

The cabinet also approved a Rs 5,559 crore viability gap funding for the 1,656-km North-East natural gas pipeline grid that will connect Guwahati to major cities in the region, such as Itanagar, Dimapur, Kohima, Imphal, Aizwal, Agartala, Shillong, Silchar, Gangtok and Numaligarh.

The pipeline will enable supply of piped cooking gas to households and CNG to automobiles and industry in the region. In the absence of anchor customers, the Rs 9,265-crore pipeline is not economically viable. “The CCEA (cabinet committee on economic affairs) approved a viability gap funding of 60 per cent of the project cost,” Pradhan said.

The Cabinet also gave its nod for six PSUs to divest their shares. The six PSUs are MMTC, National Mineral Development Corporation, Bharat Heavy Electrical Ltd, Odisha Mining Corporation, Odisha Investment Corporation and Mecon. 

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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